Australia Weather News

At least $57 billion worth of infrastructure in Victoria is at risk from more frequent and severe bushfires, floods and extreme heat.

Melbourne's road and rail networks will incur the greatest costs in infrastructural damage from natural disasters, a new report reveals.

The report published by Infrastructure Victoria looked at $318 billion worth of state-owned or regulated public networks and assets. It warns that more than $57 billion worth of assets are currently at risk of damage and shows costs could blow out beyond $71 billion in the coming decades.

Recent shocks to global fuel markets have brought supply chains into focus. But the physical networks that we rely on every day to move supplies, power our homes and keep communities safe are under threat as well, as the frequency and severity of disasters increase with a warming climate.

According to its authors, the Warning Signs report is a first of its kind in Australia and shows how extreme weather events will impact infrastructure across Victoria in 2030. It also forecasts how this could look in a "worst case" scenario in 2070.

But the report stresses that the financial fallout from these hazards could be mitigated by an array of cost-effective actions and funding measures to safeguard infrastructure now.

Identifying risk

Natural disasters are not a new phenomenon but their growing frequency and severity challenge the environment and conditions these structures were built to withstand.

"Our research highlights which assets are most exposed, which climate risks matter most and where risks are concentrated across the state", says Jonathan Spear, Infrastructure Victoria CEO. 

"It shows where the Victorian government should act now to reduce future damage, service disruption and millions in recovery costs."

Overall, the report identified roads, rail, energy infrastructure and health assets as the most vulnerable sectors. The climate hazards with the highest potential costs are bushfires, followed by floods and extreme heat.

The report shows cities and towns generally have a higher value of infrastructure at risk from climate hazards. Melbourne and its surrounding areas will add the biggest share of damage costs from natural disasters, followed by regional centres including Geelong, Mildura, Shepparton, Portland and Bendigo.

Cost of flooded roads

Roads are the most valuable infrastructural asset at risk, with up to $20 billion worth of assets at risk in 2030.

Flood waters can wash away road foundations or close off sections that are inundated. In January, heavy rains led to major flash flooding along the Great Ocean Road, sweeping cars out to sea.

Bushfires can damage roads, destroy signs, lights and barriers and also compromise trees, leading to road closures.

These are largely concentrated around Melbourne but also include major corridors such as the Hume and Princes highways to the north and east.

Heat damage to rail network

Up to $10 billion worth of rail infrastructure, including tracks, stations, signals and depots, is at risk of damage, particularly from extreme heat as tracks expand and buckle. This can cause delays not only for commuters but for rail freight transport.

The value of rail infrastructure at risk is the largest in Melbourne, Geelong and around regional corridors, particularly in the north-west.

Fire threatens energy supply

Power lines and power stations are at most risk of damage from bushfires and Infrastructure Victoria found $7 billion worth of energy assets at risk in 2030. These facilities are concentrated in the La Trobe Valley, Portland and in the north-west near Mildura.

Climate risk is evolving

Climate change is already affecting Victoria. The state's annual average temperature has risen by 1.2 C since 1910. According to Victoria's Climate Science Report from 2024, warming has made heatwaves more intense, longer lasting and more frequent. 

The state has become drier, while the intensity of short-duration extreme rainfall events is projected to increase. Fire weather and fire activity are also projected to increase in many regions of south-east Australia.An estimated $5.3 billion in health assets, including hospitals, around the state will be at risk in 2030.

In January, as Victoria sweltered under heatwave conditions and bushfires burned throughout the state, a fast-moving grassfire in Natimuk stood out. For one, it moved so quickly that the aged care centre in town couldn't be evacuated in time.

Fortunately, firefighters were able to protect the site and its residents, but the nature of the fire highlights how existing systems were inadequate to meet a disaster of such magnitude.

Infrastructure Victoria modelled risk based on climate factors in 2030 and 2070 emissions scenarios. Across all natural disasters, risk exposure will increase as temperatures rise.

"The reality is we are experiencing extreme weather events now and that is only going to become more frequent in the future," Dr Spear said.

"Now is the time to start to take action to make sure our infrastructure is ready for that more frequent, extreme weather that we're going to have now and in the future."

The cost of action vs inaction

While the report paints a grim picture of the risks of a warming world, it also highlights the opportunities of acting before disaster hits.

"Funding high-priority, cost-effective infrastructure adaptation actions can save millions in recovery costs and lost productivity," Dr Spear said.

The Australian government spent an average of $1.6 billion each year on disaster recovery from 2012–13 to 2023–24, but the report found the return on pre-emptively acting is huge.

Climate-proofing infrastructure can seem like an overwhelming challenge, but even cleaning stormwater drains can offer a return of $5 in reduced damage for every dollar spent.

Jonathan Spear says acknowledging the growing risks and factoring them into infrastructure planning will allow the country to navigate the coming decades.

"We need to start taking action to make sure our infrastructure is going to continue to work in the face of the more extreme weather we're already facing.

"This is a challenge that we're going to have to work on over the coming decades as our climate becomes hotter and our weather becomes more extreme.

"We can factor this in when we're maintaining the infrastructure we already have and when we're building new infrastructure to make sure it's going to be suitable to work in these more frequent extreme weather conditions."